December, 2009
Attention Anthony Bolton
With the Fidelity man off to China in the not too distant future, we have some suggested reading for him.
It’s the latest Popular Delusions note from SocGen’s Dylan Crisis (née Grice).
Like Bolton he thinks there is plenty of long-term upside in China but he reckons China’s looming financial crisis will provide the next buying opportunity.
Swiss regulator dishes out first forex license
Back in April, Swiss regulator Finma decided to follow in the footsteps of US regulators and clamp down on unregulated Swiss-based foreign exchange firms providing retail customers with access to highly leveraged forex trading accounts.
US problems still flowing down Mexico’s way
The slide in Mexico’s remittances has, according to BNP Paribas, showed few signs of abating.
In fact, the analysts say it could be accelerating:
As BNP Paribas pointed out in their Mexican note this week:
Goldman bankers and their (alleged) guns, the sequel
So Goldman bankers are not swapping their Rolex’s for revolvers in preparation for a populist uprising, as reported in a Bloomberg comment piece last week.
Unsurprisingly, the idea of gun-weilding banker boys,
‘Grand Theft Auto’ helps traders make money
Would you have thought the future of trading lies in gaming titles like Grand Theft Auto?
That’s not, by the way, because the title teaches bankers street-smart dealmaking skills.
Rather, it’s because
Lunch Wrap
On FT Alphaville Thursday morning,
- A global banker tax?
- Nakheel bondholders are just having a ‘temper tantrum’.
- A Basel round-up for bonus-bugged bankers.
- Greek default or not?
- Betting on the eurozone’s weakest links.
A Basel round-up for bonus-bugged bankers
Flying somewhat under bankers’ radars on Thursday, obfuscated as they are by new bonus taxes, are the maneuverings of the Basel Committee.
The Committee met on Tuesday and Wednesday to discuss a package of potential reforms to the global banking system.
Markets live transcript 10 Dec 2009
Markets live chat transcript for the chat ending at 12:16 on 10 Dec 2009. Participants in this chat were: Neil Hume, FT (NH) Miles Johnson, FT (MJ) NH:hey there NH:welcome to Markets Live
Nakheel bondholders are having a ‘temper tantrum’
The UAE’s English language newspaper The National put out a snippy editorial on Wednesday, lecturing about the perils of moral hazard and the like.
In short, it told Nakheel bondholders to get over themselves,
Greece default or no?
Does the market believe Greece when it says there’s “absolutely” no risk the country will default on its debt?
The answer, perhaps surprisingly, seems to be (sort of) yes. At least in the case of the CDS market.
A global banker tax? (updated with breaking news from France)
Might other countries follow the UK’s lead and hit the bankers where it really hurts?
That certainly is the impression one gets reading the letter penned by Gordon Brown and Nicolas Sarkozy in the Wall Street Journal on Thursday.
Betting on the eurozone’s weakest links
One man’s woe is another man’s windfall, as the financial crisis reminds us again and again.
Now, the eurozone’s problems are providing a field day for some savvy hedge funds who just can’t wait for more trouble to rear its ugly head.
Darling’s fiscal fiction
BNP Paribas’ Alan Clarke is not the only City economist seriously displeased with Wednesday’s pre-Budget report.
Citigroup’s Michael Saunders also has a few choice words for the chancellor, who he accuses of trying to create a fiscal fiction that the UK’s huge deficit can be resolved by taxing the ‘few and not the many’.
Mexico’s new ‘C’ for commodity banker
Mexican Finance Minister Agustin Carstens — the man who netted Mexico a profit of more than $5bn by shrewdly hedging 2009 oil output at $70 per barrel — has been nominated by Mexico’s president Felipe Calderón on Wednesday to head the country’s central bank,
‘Alistair in Wonderland’ believes in Santa Claus, BNP Paribas says
BNP Paribas’ UK economist Alan Clarke has issued a scathing critique of Wednesday’s pre-budget report.
And we do mean scathing. Consider the following from Clarke’s note, emphasis ours:
The Pre-Budget Report was a political exercise and delivered little in the way of concrete details on how the government intends to narrow the budget deficit.
Adventures in sovereign bonds, European insurers edition
FT Alphaville readers will remember that some insurers are actually rather terrible bond investors.
Corporates, hybrids, you name it — insurers were usually invested in it. And sovereigns bonds, many of which are now under pressure,
Luxury purchases: The rush for real assets
The boom times, it appears, are back.
Savills, the UK estate agent, recently sold a London house for £40m, Bentley began production on a luxury car worth £220,000, and this week Rembrandt’s “Portrait of a man”
Further reading
Elsewhere on Thursday,
- Irrational exuberance — then and now.
- The funniest 750 words of the financial crisis.
- Buiter: “It’s five minutes to midnight for Greece”.
- Depression economics:
Pink picks
Comment, analysis and other offerings from Wednesday’s FT,
Pre-Budget report analysis: Are plans a financial elixir or bad medicine?
The FT’s Chris Giles walks you through the pre-Budget report and its ability to fix Britain’s finances.
AV after dark
On FT Alphaville late Wednesday,
- Petropavlovsk misses out.
- Bank of America’s $45bn cheque to the Treasury.
- Sovereigns continue to dominate CDS market activity.
- More bonus tax maths.
Snap news
Breaking pre-market news on Thursday,
- Gordon Brown and Nicolas Sarkozy call for Global Finance, Global Regulation, Global Banker Tax – WSJ
- Dubai’s finance chief says market reaction to debt problems was “psychological”,
UK’s Darling tightens screws
UK chancellor Alistair Darling on Wednesday outlined the first steps in the drive to cut Britain’s massive budget deficit, raising taxes on middle-income earners, raiding City bonuses and imposing deep cuts across much of Whitehall.
Banker fury at UK bonus ‘supertax’
City bankers reacted with fury to plans to levy an immediate 50% supertax on banks’ discretionary bonus pay-outs, saying the move would boost rival financial centres. Alistair Darling, chancellor, said all banks had benefited from government support and should be rebuilding capital rather than paying out generous bonuses to staff.
UK banks’ bonus tax tops 100%
The UK levy on bankers’ bonuses set in the pre-Budget report will push the total tax bill on a bonus born by employer and employee to more than 100%, according to the Chartered Institute of Taxation.
Citi in talks for equity offering
Citigroup is in advanced talks with US regulators over plans to raise more than $15bn in an equity offering, in a push to repay $20bn in Tarp bail-out funds as early as Thursday. Citi also intends to raise around $2bn of mandatory convertible securities,
Kuwait deals blow to Citi
The Kuwait Investment Authority has held internal discussions about scaling back its banking relationship with Citigroup in a move that could include transferring funds currently deposited with the US bank.
BofA repays Tarp debts
Bank of America has fully repaid the US government the $45bn in aid it gained in the financial crisis, the bank said on Wednesday, reports Reuters. The bank sent the US Treasury a mix of cash from its corporate coffers and money raised as part of a $19.29bn securities offering earlier this week to settle its outstanding TARP debt.
HSBC set to buy RBS Asian assets
HSBC is closing in on acquiring the remaining Asian retail and commercial assets being divested by UK lender RBS. The two sides have struck a deal for the assets in China, India and Malaysia, subject to regulatory approval in the three countries.
StanChart downplays Dubai fears
Standard Chartered, the UK emerging markets bank, played down its exposure to the financial crisis in Dubai on Wednesday as it announced profits were set to hit record levels. The bank’s shares came under pressure this month after news that it has about $1bn of exposure to Dubai World,